Bureau's tips for using your tax refund wisely

Deciding what to do with a tax refund is an important decision, especially in today’s economy. Many consumers view tax refunds as unplanned bonuses, but it may make more sense to plan ahead so it doesn’t go to waste.

The Better Business Bureau advises consumers to consider a few options that can provide long-term financial benefits.

It’s easy to get caught up in the excitement of unplanned or extra cash, however, it is a good idea to set some financial goals before deciding how to spend your refund.

BBB and Clear Point Credit Counseling Solutions recommend the following tips to tax refund recipients:

Pay down your debt. Refund checks usually arrive when many consumers are still struggling with holiday bills. Use your refund for some much needed debt relief. If you have an outstanding balance on more than one credit card, you can either try to pay off the lowest balance card first, or direct the funds toward the card carrying the highest interest rate.

Consider your financial goals. If you are trying to save for a down payment on a house or car or wish contribute to your child’s college tuition one day, consider applying your tax refund toward these goals. Having a set of short-term and long-term financial goals help you be more conscientious about how you spend your tax refund or any other extra money that comes your way.

Save it for a rainy day. Why not give yourself an even bigger return on your tax refund by putting the money into an account which earns interest? Your tax refund will continue to grow if you put it into savings or invest the money. When an unexpected expense comes along, being able to draw from a savings account is always a better option than having to borrow money which only adds to your debt-load.

n Keep things in perspective. Working your way out of debt can seem like a daunting task. Keep in mind every little bit helps. Paying down debt takes time, but will have an impact. Stay focused on the end goal. While it may take years to pay off your debt, your ultimate reward — being debt-free — will be well worth the effort.

If debt is a continuing problem, consider a credit counselor. BBB has information on more than 2,000 Credit & Debt Counseling firms, including hundreds of Accredited Businesses. BBB Business Reviews are available for free at www.bbb.org/search .

Consider investing in your home or in others. Your refund check also provides the opportunity to improve your life or the lives of others. Use the money to spruce up your home or make it more energy-efficient. Improve your career opportunities by taking a class or training course. You may want to donate your tax refund to a charitable organization. You’ll help improve the lives of others, and your charitable gift may reduce next year’s tax burden. Check out BBB Wise Giving Alliance at www.bbb.org/charity for more information on trustworthy charities.

For more consumer tips you can trust, visit bbb.org. To report fraudulent activity or unscrupulous business practices, call the BBB Hotline at 903-581-8373.